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Public Policy: Uncle Sam’s Exam


Medicare has been scrutinizing your practice for more than a year through its P-4-P program. But how is the program performing for you? We put Uncle Sam on our exam table.

They had a strong team. A patient-centered operating model. An EMR that they wanted to incorporate more into the practice.

So why not, thought the leaders of Dover Orthopaedic Center last year. Why not participate in Medicare’s pay-for-performance program, and report on work they were already doing? They’d gain some valuable practice in the program before it likely becomes mandatory (and starts penalizing doctors for making reporting mistakes), and they could cash in on the government-offered bonus of up to 1.5 percent of their total Medicare billing.

The 2007 Physician Quality Reporting Initiative, or PQRI, seemed to be a good fit for this four-physician practice situated south of Akron, Ohio. So confident was the group that it signed up for the 2008 program as well. So far, it’s generally pleased with PQRI but reserving judgment until it has more experience - and its promised bonus.

But what about the rest of the country’s physicians? How many partook of this so-far optional incentive program offered by the federal government? Are their thumbs up or down?

And should your practice take part, too?

A look at the numbers

First, let’s examine how the program works:

Participating practices were required to select at least three measures on which to report from a CMS list of 74, with some specialists required to select only one or two. Participants must report on their chosen quality measures for least 80 percent of reportable cases. The average number of reported measures per NPI number (and you must have one to participate) was 3.58 - higher than required. This is surprising, as participants were not compensated for submitting extra measures.

One happy aspect of the 1.5 percent bonus is that it’s calculated on a provider’s total allowed Medicare charges for that payment period, not just the reported measures. But the bonus is all or nothing: There is no partial payment for doing some of the work. Moreover, some payouts were capped under the 2007 rules. The cap, which is not in effect this year, prevented full payout for reporting on measures when the actual reporting instances were too few.

So, has PQRI been a success? It depends on your point of view. CMS announced in July that 56,700 physicians - 52 percent of the nearly 110,000 who participated - reported everything correctly in 2007, and therefore will receive their bonuses, which average about $635 per physician. Total payout nationwide: $36 million.

So, for these physicians, it can be said that PQRI was a success - if you consider a small bonus, plus the experience gained in participating in a program that is likely to expand, a success.

As for the other 48 percent of participants? Well, thanks for playing. They will be paid nothing because CMS decided that they failed to report the data correctly. There is no appeal.

Win or lose, all participants can access a personalized, confidential feedback report from CMS that shows their own data compared to all other participants. This report must be accessed through CMS’ security system, called the “Individuals Authorized Access to CMS Computer Service - Provider Community,” or IACS-PC.

Rah! Rah!

Marilyn Orr, who was the executive director of Dover Ortho during the 2007 PQRI program (and now serves as executive director at Cincinnati-based Beacon Orthopaedics) says that the practice wanted to be more proactive. “Think of the nature of orthopedic practices - usually reactive,” she says. Broken bones from falls, sports injuries, and the like.

The practice decided to focus on safety in terms of drug interactions. “With orthopedic practices, it’s really easy to lose track of all the prescriptions for patients; most are written by the patients’ family doctors,” she says. “Medication reconciliation is a PQRI measure.”

Essentially, Dover Ortho used PQRI to set an in-practice goal of ramping up drug safety for its patients. If successful, this would keep patients safer and happier, and earn it some extra money.

The practice also has a DEXA scanner. “We found that a lot of our patients were not having bone density scans done,” says Orr. This, too, is a PQRI measure, so Dover Ortho screens more patients and reports on doing so to CMS.

Idaho Emergency Physicians in Boise also participated in PQRI, spending several thousand dollars to rig its billing system to handle the PQRI reporting. “We made a decision that if our [billing] system allowed us to, we would participate,” says Tom Peterson, the practice’s, executive director. Peterson figured the practice would earn back its capital layout fourfold in bonus money.

Idaho Emergency’s coding manager, Lisa Jolliff, was also heavily involved in the project. “We had to train our physicians to provide accurate documentation,” she says. “But it was easy for them; most of it was just standard of care.”

But participating in PQRI did not require new technologies or even updating old ones. Signature Medical Associates in Elgin, Ill., created a paper “cheat sheet” that listed the four PQRI measures it had chosen (smoking assessment, pneumonia assessment, diabetes screening, and heart patients receiving aspirin), according to internist Ron Hirsch. The practice’s seven physicians would circle each measure as they performed them, Hirsch explains, and the sheets would then be sent to billing, where the biller would add the PQRI information to the appropriate claim.

Hirsch says he was pleasantly surprised “that you could report codes as simply as this; it requires no effort.” Of course, he’s reserving his final judgment, saying, “It was a very easy process for us, but I’ll have a better impression when I get the check.”

Boo! Hiss!

Ah yes, about those checks: One very large practice received a first-year bonus of more than $200,000, but the average group’s bonus was a mere $4,700, according to CMS. Hirsch learned in July that he was among the physicians who will get a PQRI bonus. For his efforts, he was expecting a payout of a few hundred dollars - about average.

Looking at numbers like that and other aspects of PQRI, there are those who say the program is a sucker’s bet. William Schreiber, one of two family practice physicians at Plank Road Medical Practice in North Syracuse, N.Y. is not a fan. “It’s only a tiny minority of our total visits,” he says. “Of 32 patients today, I think I got two PQRI prompts - two diabetics.”

He says many of his colleagues are similarly unimpressed. “Nobody I know thinks this has any value. Nobody. Zero.” But why not?

Doctors worry that eventually the “bonus” will become a penalty, he says: “There’s a universal conception in the medical community that once quality reporting is tied to reimbursement, they’ll hold back on [reimbursement],” says Schreiber. “It’s just assumed that that’s exactly what’s going to happen.”

This negative view, though not truly “universal,” is certainly common. Discussions about PQRI on the online physician community Sermo.com for example, included many comments like these:

“There is no way on this planet … that this can be good for physicians.”

“I think the idea of PQRI reflecting the quality and outcomes measures for diseases such as heart disease, diabetes, etc., in an ideal world is not bad. However most doctors don’t operate in an ideal world.”

“This will become an excuse to pay us less.”

“I had the ‘honor’ of listening to the AHRQ and PQRI Gods at a recent conference. … These Gods are very adamant and arrogant about shoving these unfunded mandates down our throats. They are totally out of sync with the reality. It is likely to be an ugly fight.”

“PQRI is a flagrant effort to get doctors to unknowingly enroll our patients into a huge medical experiment without their consent or even their knowledge.”

“PQRI is idiotic and adds nothing to quality of care…”

Unhinged conspiracy theorists? Hardly. After all, most pay-for-performance programs define performance according to patient outcomes, as if you have total control over patient behavior. But there is only so much you can do to get a diabetic’s blood sugar or weight under control. It’s up to them to stay out of the McDonald’s drive-thru.

“Now more than ever we can look at these quality measures,” says Schreiber. “There’s been an explosion of data reporting but costs are going though the roof. More reporting has coincided with more costs.”

Although PQRI is, for now, merely a voluntary pay-for-reporting program - if you choose to participate, you could get paid bonuses for reporting on your performance of various tests and screens - its detractors worry that it will inevitably become a mandatory penalty for nonperformance-of-your-patients program: If they don’t get healthier, you get paid less.

Indeed, CMS itself seems to be feeding this speculation. In announcing the first-year payouts on July 15, acting administrator Kerry Weems called them a “first step toward improving how Medicare pays for health care services.” Weems did not elaborate on what the next step would be, but added: “We all can agree that the current payment system needs to be reformed to pay for high quality care rather than continuing to pay for volume of services. The PQRI has proven to be a successful step towards establishing a value-based purchasing program for physicians.”

But certainly not everyone would agree with Weems’ characterization of PQRI as a proven success when barely more than half of its participants correctly followed the rules, according to the program’s own creators. Schreiber says that PQRI’s deciders “don’t listen to the people in the trenches.” And most doctors dislike the whole concept of outcome-based medicine.

“Nothing’s going to change,” Schreiber says. “Unless you want us to discharge our noncompliant patients. Then we’ll see some change.”

There are other, more objective, concerns regarding the mechanics of PQRI, as well. Just as the Sacajawea dollar confounded soda machines, PQRI reporting can foul up your claims processing. PQRI requires reporters to add the information onto the practice’s regular Medicare claim. But there is no money in the “amount” box for the PQRI line item, and this baffles many billing systems. These systems may reject claims that have a zero dollar amount on a line item, or they’ll mindlessly strip off any line item with a zero dollar amount before pushing the claim through. If that happens, your PQRI information will never get reported, possibly unbeknownst to you until it’s too late.

If your billing software is indeed complaining about PRQI submissions, then you’ll have to make adjustments. Translation: Your vendor will have to program some workaround, at your expense.

The sheer influx of more line items can also cost you. Adding too many line items to an electronic claim could cause it to automatically bump over into two claims. Be sure to check with your billing system on whether this will cost you more to process.


What about 2008 and beyond?

Clearly, how Medicare’s pay-for-performance program will play out is unclear. Both supporters and naysayers agree on one thing, though: It’s here to stay.

“That’s why we’re participating,” says Peterson. “We think CMS will take that approach.” He’s fairly certain that when PQRI becomes a true pay-for-performance program it will reduce reimbursements. “I don’t think we’ll get more. We’ll hold onto what we have,” he says.

Like Schreiber, Peterson questions the validity of using pay-for-performance to improve overall quality, despite his own involvement. He says he appreciates the industry’s intent to reduce medical errors, but he’s not convinced that PQRI will accomplish this. “The people who dream these things up don’t have experience in the trenches,” he says.

An effective program or not, use this premandatory phase wisely. “It’s a good time to get the kinks out,” says Peterson.

Here are some of the changes CMS made for the 2008 program:




  • The list of reportable measures grew from 74 to 119, allowing many more physicians to become eligible.
  • The payout cap was eliminated.
  • Congress required CMS to develop structural measures, not just clinical measures. This was done to encourage physicians to adopt EMR and/or e-prescribing systems.
  • In addition to the full-year program, CMS now offers a half-year version, for which you need only report on 15 consecutive patients for a single measure, instead of 80 percent of all patients for all measures you select. Payout is smaller, but you’re done much quicker.

And 2009? Very, very unsettled right now, although there are some rumblings that next year’s program will increase the participation bonus from 1.5 percent to 2 percent. This bonus is a carrot to lure doctors into participating, and the government is keen on increasing program enrollment, according to Robert Bennett, government affairs representative for the Medical Group Management Association: “What the government is contemplating is, ‘If we got 16 percent [of eligible physicians] to participate [with a 1.5 percent bonus], what can we get for 2 percent?’ Congress really wants physicians to participate.”

So much so that it would consider authorizing a “stick” to go along with the carrot? Say, a 1.5 percent bonus for those who opt in, and a 0.5 percent penalty for those who beg off? It’s possible, says Bennett.

Stay tuned. This behemoth of a program is still cutting its teeth. Physician reactions, though, are all over the map, admits Bennett. “We’ve heard from people who are doing it to learn. Others who think it’s their obligation to participate in Medicare. We’ve also heard from some angry people, claiming this is nothing more than bureaucratic red tape and double-checking up on physicians. It’s a legitimate concern. But the counter of that argument is if you’re going to build something up, you’ve got to start small.”

Either way, given that PQRI is not going away, getting involved with it now gives you a chance to have a voice in shaping the final product, while getting a jump on understanding CMS’ data-reporting requirements. While the government hasn’t said that the program will become mandatory for all practices that accept Medicare, or that it will penalize those who stay out, who’s kidding whom?


Shirley Grace is an associate editor on staff at Physicians Practice. She can be reached at sgrace@physicianspractice.com.

This article originally appeared in the September 2008 issue of Physicians Practice.

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